AIG

AIG has very little growth in their operations, their investments are where the gains are.

Insurance arbitrage is not going to yield growth, the only way this company has ever grown is by taking risks..and it is obvious they know that based on some comments made recently. They have sold so much of their high return assets that it makes book value and past EPS of no value looking forward.

It is also a crime that they are allowed to write down taxes through passing forward NOL's as they are..what a slap in the taxpayers face.

the faster the Fed can sell the assets, the faster AIG can repurchase...having AIG as an enormous buyer every time shares are liquidated ensures price support and is actually decreasing the outstanding shares in the long run. Government will be gone by November (election)...and it'll run hard after that.

They are selling assets that have performed nicely for them in order to bring in cash, there will be no book value chasing as they are selling assets which are ADDING to book value to buy shares to slow dilution.

Even selling these prime assets they still are unable to buy all the shares, this weekend they purchased 35% of the shares, that means there was still dilution and that is a lowering of book value as well.

Their core assets are not growth assets, the only way this company has ever grown is by taking risks. I think you are way off on book value and way off on what their growth prospects are.

Over the weekend, the government sold a good portion of its stake in AIG (AIG), 5 billion shares, of which the company bought back 2 billion. Very few investors could get in on the secondary offering, since it was hammered out so quickly, but Cramer thinks the deal was like a giant neon sign that says "Buy, buy, buy AIG." The fact that the government allowed AIG to buy back 45% of its shares shows that it has confidence in the company, and the fact that management bought back the stock is a sign that it feels ready to hit its target of 10% revenue growth. AIG is now a leaner, meaner company than it was when it was a ward of the state three years ago, hobbled with $182 billion worth of bailouts. It is now a simpler company, focused on life insurance, casualty insurance and mortgage guarantees. The stock has risen 37% so far this year, and has further to run, given that it is trading at a $27 discount to its book value of $58.71 per share. The recent buyback shrank the share count by 4%, and AIG will likely have other buybacks in the near future. Cramer thinks the success of the secondary offering was an impressive indication of real demand for the stock.

Directors bought 1/2 million in stock on the open market today...gotta love that.

I am not sure that those arent option warrants that he is executing.

Either way the dude has been getting killed buying AIG. The bulk of his buys, all made pre-split in 2008, the 1 for 20 reverse happened in 09, so his buys until 2011 are all divided by 20, he owns all those shares at extremely high prices..will probably never recover his cost basis.

He bought at 70 pre split in 2006, his cost basis is probably 50-70% higher than current price.

i don't care when THEY (not he) bought in the past, it doesn't change the fact that they wouldn't be buying shares if they didn't believe the stock has much upside (even if it didn't work out before). it's always great to have the directors invested on the same side as you.